Analysis: Saudis and Iran Moving Together

WASHINGTON, April 22 (UPI) -- Saudi Arabia and Iran are regional rivals whose traditional approach to the Israel-Palestinian conflict has been diametrically opposite. But now they are moving closer together on that and other issues, with potentially immense consequences for the United States and the entire world.

Over the past 20 years, Saudi Arabia has been moderate on both global oil prices and in its approach to the Israel-Arab conflict. The Saudis strongly support the Palestinians. But until recently, that support has been low-key. And the Saudis quietly strongly supported the Oslo Peace Process over the past decade from its initiation in August-September 1993 to its breakdown after the July 2000 Camp David II summit.

However, these relatively moderate policies have become increasingly hard-line over the past three years because of the replacement of the pro-American King Fahd by the tougher Crown Prince Abdullah bin Abdul Aziz and because of the collapse of the Oslo Process and start of the second Palestinian Intifada. Therefore now Saudi and Iranian policies on the Israel-Arab conflict are converging although the domestic reasons for this are very different in each country.

Both governments sit uneasily on large reservoirs of resentment and frustration because economic growth and even massive oil revenues have had difficulty in keeping up with explosive population growth. In Saudi Arabia, resentment against the regime takes the form of intense anti-American and radical Islamic sentiments.

The Saudi regime has sought to immunize itself against these sentiments by showing itself to be an impeccable champion of Islamic causes from Bosnia to the Taliban in Afghanistan and Pakistan's first Islamic nuclear weapon. Support for the Palestinian second intifada fits into this pattern.

The Iranian regime appears to be more stable than the Saudi one because it is far more broadly based. There is genuine, if limited, choice in elections in Iran and -- again within clearly defined boundaries -- genuine difference and debate in the national press. But, again, the government is unpopular because of its failure to solve longstanding economic and social problems. The difference is that, in contrast to Saudi Arabia, resentment and alienation in Iran takes the form of support for more moderate, pragmatic policies and sympathy with American popular culture.

In Saudi Arabia, supporting the Palestinians is seen as a lightning rod to distract a population feared to be far more radical than its rulers. In Iran, supporting the Palestinians serves the same purpose. But there the aim is distract a population that is believed to be far less radical and hard-line than its leaders.

The Bush administration has consistently wooed Saudi Arabia and turned a blind eye to the two-faced nature of many of its policies. At the same time, it has repeatedly ignored and failed to woo more moderate elements in Iran.

President Bush's now famous -- indeed notorious -- inclusion of Iran in an international "axis of evil" in his State of the Union speech this year is widely regarded in Tehran and throughout the region, as a crucial turning point.

Since then, pro-American sentiments in Tehran have been less openly and enthusiastically expressed and popular feeling, has coalesced anew behind a government that, for all its faults, is seen as representative of the national interest against a potential direct threat from the dominant superpower.

Iran in contrast to Saudi Arabia has always been a hard-line hawk on the Israel-Arab conflict. All through the years of the Oslo Peace Process, its support for the Islamic Shiite fundamentalist Hezbollah, or Party of God, guerrilla group in southern Lebanon never wavered.

Iran flatly opposed even the tentative moves that late President Hafez Assad of Syria made to explore peace with Israel in the early years of the Oslo process. And the ever-cautious Assad never dared risk losing his Iranian protector and counterbalance against both the United States and Iraq by committing himself to any kind of full-scale peace negotiations with the Jewish state.

Saudi Arabia has a population of around 20-22 million. Iran's population is 80 million and rising faster. Saudi Arabia's oil reserves remain virtually inexhaustible. Iran's are clearly running out.

The Iranians have already started making ambitious plans to use regionally available natural gas to re-pressurize their older oil fields to make cost effective extraction of their resources feasible for another decade or two. Yet with such a large population, Iran must maintain high oil prices in the short term to maximize its revenues and future investment prospects.

Through the 1980s and 90s, the Saudis could afford to take a long-term view of the oil market and allow prices remain relatively low. They did not want to kill the Reagan and Clinton-era economic booms in the United States, as these were the driving forces in global economic growth and soaring demand for their product. Therefore during those two decades, Saudi energy and Israel-Palestinian conflict policies were both generally supportive of U.S. interests and initiatives.

In the past few years, however, that has been changing dramatically for a variety of reasons.

First, the ailing King Fahd, ruler of the Desert Kingdom for nearly a quarter of a century as crown prince under King Khaled and then as monarch in his own right finally had to relinquish the reins of power because of his failing health. His half-brother, Crown Prince Abdullah, took over and has cautiously but steadily followed a policy of strengthening ties to powerful, potentially hostile neighbors like Iraq and Iran while distancing himself from the United States.

Second, in 1999, Crown Prince Abdullah negotiated a radical and ambitious production cutting agreement with Iran to shore up global oil prices.

U.S. policy makers and market analysts scoffed.

The Organization of Petroleum Exporting Countries was a dead duck, they said. Its old market stranglehold of the 1970s had been rendered obsolete by two decades of new oil fields coming on line around the world and radically more advanced technology becoming easily available to access them.

Nevertheless, Crown Prince Abdullah's supposedly old fashioned and out of date deal with the Iranians worked. Global oil prices soared by 350 percent in less than two years though they then fell significantly. But now they are showing signs of rising again.

Third, Crown Prince Abdullah's succession to effective power in Riyadh was followed by the collapse of the Oslo Peace Process after the failure of the Camp David Summit and the start of the second, or "al Aksa" Palestinian intifada at the end of September 2001.

Since then, radical pro-Palestinian sentiment throughout the Middle East including Saudi Arabia itself has remorselessly intensified. And under Abdullah's quiet but firm direction, Saudi policy and tacit encouragement for tougher policies and public statements has intensified too. The recent Saudi telethon that raised millions of dollars for Palestinians was a dramatic but entirely consistent example of this process.

The converging policies of Saudi Arabia and Iran on oil pricing and the Israel-Palestinian conflict do not bode well for hopes of any rapid resolution or even easing of the conflict. Iran has become increasingly bold in providing massive weapons supplies to the Palestinians, as the Israeli interception of the Karine freighter earlier this year showed.

The Bush administration has shown itself repeatedly willfully blind to the radical changes taking place in Saudi policy under Crown Prince Abdullah's direction and they have also shown themselves deaf and blind to the prospects of improving relations with Iran offered by President Mohamed Khatami in Tehran. As a result Saudi policies are changing in ways inimical to U.S. interests anyway while Iranian polices are not changing at all.

The global oil crisis of the 1970s was only possible because Saudi Arabia and Iran, the two greatness oil producers in the world, teamed up to enforce their mutual colossal energy clout. The 1979 Iranian Revolution had the paradoxical effect of ensuring 20 years of global economic growth based on cheap oil supplies because the new Iranian rulers were so hostile to the Saudis. But now, for the first time in almost a quarter of a century, Saudi and Iranian policies are converging again.

This is good news for the Palestinians and bad news for the Israelis. It may also prove to be very bad news indeed for the United States and the Bush administration.

United Press International is a leading provider of news, photos and information to millions of readers around the globe via UPI.com and its licensing services.

With a history of reliable reporting dating back to 1907, today's UPI is a credible source for the most important stories of the day, continually updated - a one-stop site for U.S. and world news, as well as entertainment, trends, science, health and stunning photography. UPI also provides insightful reports on key topics of geopolitical importance, including energy and security.

A Spanish version of the site reaches millions of readers in Latin America and beyond.

UPI was founded in 1907 by E.W. Scripps as the United Press (UP). It became known as UPI after a merger with the International News Service in 1958, which was founded in 1909 by William Randolph Hearst. Today, UPI is owned by News World Communications.